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Legal Rulings

About Legal Rulings

A Legal Ruling is a published interpretation of California income or franchise tax laws by the Chief Counsel of the FTB. A Legal Ruling is the conclusion of the Chief Counsel of the FTB on how the law should be applied to a specific set of hypothetical facts, and is equivalent to an IRS Revenue Ruling. Legal Rulings are issued for the information and guidance of taxpayers, FTB personnel, and other interested parties. Because Legal Rulings are generally interpretive of existing law, they have retroactive effect unless otherwise stated in the ruling.

Because each Legal Ruling represents the conclusion of the Chief Counsel of the FTB regarding the application of law to the entire statement of facts specified, taxpayers, FTB personnel, and other interested parties are cautioned against reaching the same conclusion in other cases unless the facts and circumstances are the same. In addition, taxpayers, FTB personnel, and other interested parties should consider the effect of subsequent legislation, regulations, court decisions, legal rulings, notices, procedures, and other guidance.

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Active Legal Rulings

  • Legal Ruling 18-01 - Modification of Legal Ruling 2014-01, Business Entities that are Members of Multiple-Member Limited Liability Companies Classified as Partnerships for Tax Purposes.
  • Legal Ruling 17-02 - Conformity to Federal Information Filing Requirements Relating to Certain Foreign Financial Assets for Nonresident Aliens.
  • Legal Ruling 17-01 - Treatment of taxes paid to another state for purposes of the Other State Tax Credit and allowable deductions
  • Legal Ruling 16-01 - Calculation of the Limited Liability Company Fee for Real Estate Dealers
  • Legal Ruling 15-02 - California Tax Treatment of Transactions between IC DISCS and their Owners
  • Legal Ruling 15-01 – Determining Whether a Tribal Member Is "Living On" or "Living Off" His or Her Tribe's Reservation for California Personal Income Tax Purposes
  • Legal Ruling 14-01 – Business Entities that are Members of Multiple-Member Limited Liability Companies Classified as Partnerships for Tax Purposes
  • Legal Ruling 12-01 - Business/Nonbusiness Characterization on Sale of Stock
  • Legal Ruling 11-04 - Suspension of Net Operating Loss Deductions – Extension of Carryover Periods
  • Legal Ruling 11-03 - “Ceases Operation” Within the Meaning of Sections 17941 and 23153
  • Legal Ruling 11-02 - Payments to Nonresident Former Insurance Agents Subject to Income Tax Withholding
  • Legal Ruling 11-01 - Activities of a Disregarded Entity
  • Legal Ruling 09-02 - Recapture of Credits Under the Former Farmworker Housing Credit Provisions
  • Legal Ruling 09-01 - Application of the REMIC Excess Inclusion Rules in a Unitary Combined Reporting Group
  • Legal Ruling 06-03 - Apportionment of Gains Resulting from an Election Made Pursuant to Internal Revenue Code Section 338
  • Legal Ruling 06-02 - Application of the "On Behalf Of" Exclusionary Rule of Regulation 25136(b) in the Assignment of Receipts from Sales Other Than Sales of Tangible Personal Property
  • Legal Ruling 06-01 - Apportionment Factor Treatment of Exempt Income
  • Legal Ruling 05-02 - Business or Nonbusiness Characterization of Income Earned with Respect to Cash Dividends, Pending Their Domestic Reinvestment Under Section 965 of the Internal Revenue Code
  • Legal Ruling 05-01 - Personal Services for Sales Factor Purposes
  • Legal Ruling 03-03 - Inclusion of Business Income Dividends in the Recipient's Sales Factor
  • Legal Ruling 03-02 - Application of Profit Split Method to Water's-Edge Taxpayers with Possessions Corporation Affiliates
  • Legal Ruling 03-1 - Sourcing of Partnership, S corporation and Trust Items for a Part-Year Resident
  • Legal Ruling 01-3 - California Tax Consequences of Federal Advance Refunds and Credits Provided by Internal Revenue Code Section 6428
  • Legal Ruling 01-1 - Qualifying Educational Institution for Teacher Retention Credit
  • Legal Ruling 00-1 - Manufacturers' Investment Credit Capitalized Costs Under Third-Party Contracts
  • Legal Ruling 99-2 - Net Operating Losses - "Eligible Small Business" and "New Business"
  • Legal Ruling 99-1 - Application of Public Law 86-272 (15 U.S.C. sections 381 et seq.) to Commerce Between the Commonwealth of Puerto Rico and the Fifty States
  • Legal Ruling 98-6 - Withdrawal of Obsolete Legal Rulings
  • Legal Ruling 98-5 - Business or Nonbusiness Income Characterization of Income Generated from Liquid Investments in Excess of Current and Identified Future Business Needs
  • Legal Ruling 98-4 - Recharacterization of Roth IRA Contributions
  • Legal Ruling 98-3 - Taxation of IRA Distributions Rolled Over to a Roth IRA Followed by a Change of Residence Status
  • Legal Ruling 98-2 - Withdrawal of Obsolete Legal Rulings
  • Legal Ruling 98-1 - Manufacturers' Investment Credit - Capitalized Costs of Labor for Engineering and Design
  • Legal Ruling 97-2 - Application of 18 Cal. Code of Regs. §25137(b)(1)(B) to Timber and Mineral Royalties as Rental Equivalents in the Property Factor (December 17, 1997)
  • Legal Ruling 97-1 - Subject: Exclusion of Gross Receipts From Incidental or Occasional Sales of Intangible Property From the Sales Factor (October 15, 1997)
  • Legal Ruling 96-6 - Subject: Foreign Banks With United States (California) Operations Water's-Edge Election--Bad Debt Reserve Calculation (September 12, 1996)
  • Legal Ruling 96-5 - Subject: Net Operating Losses - "Eligible Small Business" And "New Business" (August 19, 1996)
  • Legal Ruling 96-4 - Subject: Revenue And Taxation Code Section 21015--Relief From Penalty Imposed Under Section 19011 (Electronic Funds Transfer Penalty) (July 3, 1996)
  • Legal Ruling 96-3 - Subject: Revenue And Taxation Code Section 21015--Relief From Penalty Imposed Under Section 19141.5(a) (Form 5472/Record Maintenance Penalty) (July 3, 1996)
  • Legal Ruling 96-2 - Subject: Application Of No admitted Insurance Tax Law To Governmental And Quasi-Governmental Entities (June 11, 1996)
  • Legal Ruling 95-8 - Combination Of Intermediate Passive Holding Company With Unitary Operating Company Parent And Subsidiaries
  • Legal Ruling 95-7 - Combination Of Passive Parent Holding Company With Unitary Operating Company Subsidiaries
  • Legal Ruling 95-6 - Adoption Of Mark-To-Market Method Of Accounting For Dealers In Securities
  • Legal Ruling 95-5 - Effect Of The Double Weighted Sales Factor On Water's Edge Group Entities And Election Fees
  • Legal Ruling 95-4 - 1994 Water's-Edge Elections When Members Of The Group Have Different Fiscal Years
  • Legal Ruling 95-3 - Delivery Or Shipment Of Tangible Personal Property In The Sales Factor Legal Ruling 348 Withdrawn
  • Legal Ruling 95-2 - Crediting Tax Payments In Situations Involving Overpayments And Assessments For Corporations Included In An Election To File A Combined Unitary Group Single Return (Schedule R, Schedule R-7) Issue
  • Legal Ruling 95-1 - Head Of Household Filing Status Nonresident Alien, Nonresident Alien Spouse
  • Legal Ruling 94-3 - Computation Of The Alternative Minimum Tax Adjusted Current Earnings Amount For Apportioning Taxpayers
  • Legal Ruling 94-2 - Finance Leasing And Financial Corporations
  • Legal Ruling 93-4 - Taxation of a Qualified Settlement Fund
  • Legal Ruling 93-3 - Effect Of Federal Form 8332 - California And Federal Dependents
  • Legal Ruling 93-2 - Child Care Facility Startup Expense Credit Limitations And Carryover
  • Legal Ruling 93-1 - Employer Child Care Program / Contribution Credit Salary Reduction Agreements
  • Legal Ruling 92-2 - Domestic (Nonforeign) Nonresident Partner Withholding Guidelines
  • Legal Ruling 92-1 - Effect Of Previously Issued Legal Rulings
  • Legal Ruling 91-1 - Unity Of Ownership
  • Legal Ruling 431 - Qualified Plan Contributions - Nonresident Partner
  • Legal Ruling 419 - California Treatment Of The Federal Safe Harbor Leasing Private Rules Under IRC Section 168 (f) (8)
  • Legal Ruling 418 - Farmers' Cooperatives. Amounts Allocated To Members Which Are Attributable To Nonmember Rates Of Transactions Are Deductible.
  • Legal Ruling 417 - Retroactive Changes To Bad-Debt Reserve For Savings And Loan Associations
  • Legal Ruling 413 - Allocation And Apportionment Treatment Of Installment Sales
  • Legal Ruling 410 - Ownership Requirement For Combined Reporting Purposes Where The Parent Is A General Corporation
  • Legal Ruling 409 - Value Is To Be Ascribed To Replacement Property Acquired As The Result Of An Involuntary Conversion Or An Exchange For Property Factor Purposes
  • Legal Ruling 396 - Taxation Of Income Generated By The Offshore Oil Operations Of A Unitary Business -- Modification Of Legal Memorandum No. 604
  • Legal Ruling 395 - Franchise Tax -- Protests And Petitions For Reassessment By Transferees
  • Legal Ruling 389 - Franchise -- Farmers' Cooperative Associations -- Income Deductible -- A Farmers' Cooperative Association May Deduct From Its Gross Income All Income, Regardless Of Source, Which Is Properly Allocated
  • Legal Ruling 386 - Claim For Refund -- Sufficiency Of Various Federal Reports
  • Legal Ruling 385 - Treatment Of Insurance Company Affiliates For Combined Reporting Purposes
  • Legal Ruling 382 - Application Of Corporate Commencing Year Tax As Credit To Tax For Year Of Dissolution For Corporations "Doing Business" Prior To Enactment Of Original Bank And Corporation Franchise Tax Act And Prior To The 1933 Amendment
  • Legal Ruling 379 - Franchise Tax -- Interest Equivalent Offset Computation Under Section 24344(b)
  • Legal Ruling 375 - Tax Credit For Accumulated Distributions Made By A Nonresident Trust To Resident Beneficiaries
  • Legal Ruling 372 - Applicability Of Public Law 86-272 To Certain Nonresident Salesmen
  • Legal Ruling 366 - Taxation Of Income Generated By The Offshore Oil Operations Private Of A Unitary Business
  • Legal Ruling 346 - Statute Of Limitations -- Refund Claims
  • Legal Ruling 345 - Nonresidents -- Source Of Income
  • Legal Ruling 300 - Military Personnel: Treated as Nonresidents When They Leave California
  • Legal Ruling 292 - Cooperative: Deductibility of Dividends Paid on its Capital Stock
  • Legal Ruling 289 - Cooperative: Deduction of Excess Expenses
  • Legal Ruling 288 - Subsidiary Corporations: Intercorporate Payments After Commencement of Liquidation
  • Legal Ruling 284 - Cooperative: Marketing Operations Ceased
  • Legal Ruling 264 - Doing Business: Litigation by a Liquidating Corporation
  • Legal Ruling 238 - Trusts: -- Accumulated Income; Taxation When There Are Both Resident And Nonresident Trustees And Beneficiaries
  • Legal Ruling 234 - Allocation: Apportionment Of The California Income Of A Unitary Business
  • Legal Ruling 211 - Dividends: Deductibility Under Section 24402
  • Legal Ruling 203 - Nonresidents: Taxability Of Oil Royalties To Nonresidents
  • Legal Ruling 184 - Suspended Corporation: Validity Of Refund Claims
  • Legal Ruling 179 - Nonresidents: Income From Intangibles
  • Legal Ruling 174 - Nonresidents: Income From California Sources
  • Legal Ruling 173 - Cooperatives: Taxability Of Foreign Members Of A Domestic Cooperative
  • Legal Ruling 145 - Royalty Income: Source
  • Legal Ruling 133 - Income: Source In California
  • Legal Ruling 123 - Nonresidents: Income From California Sources
  • Legal Ruling 122 - Residence: Students
  • Legal Ruling 90 - Doing Business: Foreign Corporations
  • Legal Ruling 84 - Income From California Sources
  • Legal Ruling 80 - Federal Waivers: Effect Of Parent Corporations Waiver On Subsidiaries
  • Legal Ruling 76 - Doing Business
  • Legal Ruling 75 - Gross Income: Income Received By A Corporate Beneficiary Of A Trust Subject To The Personal Income Tax Law
  • Legal Ruling 59 - Interest: Federal Tax Deficiencies
  • Legal Ruling 40 - Overpayment Of Tax: Credit For Overpayment Disallowed
  • Legal Ruling 38 - Doing Business: Liquidating Activities
  • Legal Ruling 13 - Dividend Income: Parent Subsidiary
  • Legal Ruling 12 - Doing Business: Liquidating Activities
  • Legal Ruling 11 - Doing Business: Activities After Withdrawal

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Last Updated: 10.19.2018


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